Do NRIs Have to File an Income Tax Return in India?

The income period decides which law applies, not the date on which you file the return.

For example, an ITR filed in July 2026 for income earned between April 2025 and March 2026 continues to be governed by the Income-tax Act, 1961. The Income-tax Act, 2025 applies to income earned from 1 April 2026.

Which Types of Indian Income Should NRIs Include for ITR?

You may have taxable income in India even while living abroad. Common examples include:

• Rent from a house or commercial property in India
• Interest from an NRO account
• Interest from taxable deposits
• Capital gains from selling Indian property, shares or mutual funds
• Dividends from Indian companies
• Salary for services performed in India
• Business or professional income connected with India

Interest earned from a qualifying NRE account is exempt from Indian income tax, subject to FEMA and RBI conditions. Under the Income-tax Act, 2025, this exemption is covered by Section 11 read with Schedule IV.

TDS does not automatically make income exempt. A bank, tenant, company or property buyer may deduct tax before making a payment, but you must still check whether the income is taxable and whether you need to file an ITR.

What is the Income Limit for Filing an ITR for NRIs?

For Tax Year 2026-27, your general filing threshold depends on the tax regime you use.
 

The new tax regime is the default regime. You may choose the old regime if you are eligible and it gives you a better result. You will generally need to file an ITR if your total Indian income, calculated for filing purposes exceeds the applicable basic exemption limit.

The ₹12 lakh rebate available to eligible resident individuals under the new regime does not apply to you as an NRI. Under the Income-tax Act, 2025, this resident-individual rebate is covered by Section 156. You also cannot use the higher old-regime exemption limits available to resident senior and super-senior citizens. For an NRI, the old-regime basic exemption limit remains Rs 2.5 lakh regardless of age.

Which Tax Regime May Be Better for NRIs?

The new regime has a higher basic exemption limit and lower slab rates, but it allows fewer deductions. The old regime has a lower exemption limit but may allow deductions that are not available under the new regime.

Suppose you have Rs 6 lakh of taxable rental and interest income in India, with no deductions or income taxed at special rates. The tax under the different regimes would therefore be:
 

Note: The amounts used in this example are provided for illustrative purposes only and should not be treated as actual tax liability.

In this example, the new regime results in a lower tax amount. The old regime may produce a different result if you can claim substantial eligible deductions, such as housing-loan interest, qualifying investments, insurance premiums or donations.

Capital gains and certain other income are taxed at special rates. If you have such income, comparing only the ordinary slab rates will not give you a complete result.

Can NRIs Be Required to File Below the Income Limit?

Yes. Filing can become compulsory even if your income does not exceed the applicable exemption limit.

You may need to file if, during the year, you:

• Deposit more than ₹ 1 crore across one or more current accounts
• Spend more than ₹ 2 lakh on foreign travel for yourself or another person
• Spend more than ₹ 1 lakh on electricity
• Have business sales, turnover or gross receipts exceeding ₹ 60 lakh
• Have professional gross receipts exceeding ₹ 10 lakh
• Have aggregate TDS and TCS of ₹ 25,000 or more
• Deposit ₹ 50 lakh or more across one or more savings accounts

These conditions must be checked separately from your income. For example, depositing ₹50 lakh in a savings account does not mean that the complete deposit is taxable income. It may still create a filing requirement. You may also have to file if the Income Tax Department issues a notice requiring you to submit a return.

Is Any ITR Filing Exemption Available to NRIs?

A limited exemption is available where your total Indian income consists only of:

• Specified investment income from qualifying foreign-exchange assets
• Long-term capital gains from those assets
• A combination of the two

The required tax must also have been deducted at source.

Under the Income Tax Act, 2025, this exemption is covered by Section 216. It corresponds to Section 115G of the Income-tax Act, 1961. This provision does not exempt every NRI whose income has been subject to TDS. It may not apply if you also have rental income, ordinary NRO interest or other taxable income outside the specified categories.

When is Voluntary Filing Worth Considering?

Even if filing is not compulsory, submitting an ITR may be useful when you need to:

• Claim a TDS refund
  Tax may have been deducted at a higher rate than your final liability. 
• Report a property sale
  You can calculate the actual capital gain, claim eligible costs or exemptions and request a refund if excess TDS was deducted. 
• Carry forward a loss
  Certain capital and business losses must be reported within the prescribed filing period if you want to use them in later years. 
• Claim treaty relief
  A Double Taxation Avoidance Agreement may provide relief when the same income is taxed in India and your country of residence. 
• Maintain an Indian income record
  Filed returns may support some loan, investment, visa or financial applications.

Before filing for treaty relief, check whether you need a Tax Residency Certificate, Form 41 (replacing Form 10F) or other supporting information.

Which ITR Form Should You Use?

For income earned during Financial Year 2025-26, an NRI would generally use:

• ITR-2 if you do not have income from a business or profession
• ITR-3 if you have business or professional income

NRIs cannot use ITR-1 or ITR-4 for Assessment Year 2026-27 because those forms are restricted to eligible resident taxpayers. For income earned from 1 April 2026, use the form prescribed under the Income-tax Act, 2025 and the Income-tax Rules, 2026 for your income and circumstances.

What Should NRIs Check Before Filing ITR?

Before deciding whether to file, NRIs should check:

• The residential status for the relevant income period
• Whether the 1961 Act or the 2025 Act applies
• Every source of income earned or received in India
• Whether your NRE, NRO and other bank interest is taxable
• Your basic exemption limit under the chosen regime
• Whether you have capital gains or other special-rate income
• Whether a compulsory-filing transaction applies
• The TDS and TCS recorded against your PAN
• Whether you are entitled to a refund
• Whether you need to report or carry forward a loss
• Whether a tax treaty (such as DTAA) provides relief

Final Thoughts

NRIs will generally need to file an ITR if your Indian income exceeds the applicable exemption limit or if a separate compulsory-filing condition applies. Even when filing is optional, it may help you recover excess TDS, report a property transaction, carry forward a loss or claim treaty relief. Start by identifying the period in which you earned the income. That will tell you which Income-tax Act applies. You can then calculate your Indian income, compare the two tax regimes and check whether any additional filing condition affects you.

Disclaimer:

The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability.

Nothing contained herein is intended to constitute financial, investment, legal, tax, or any other professional advice or opinion. Please obtain professional advice before making investment or any other decisions. Any investment decisions that may be made by you shall be at your own sole discretion, independent analysis and evaluation of the risks involved. The use of any information set out in this document is entirely at the user's own risk. Ujjivan Small Finance Bank Limited makes no representation or warranty, express or implied, as to the accuracy and completeness of any information herein. The Bank disclaims any and all liability for any loss or damage (direct, indirect, consequential, or otherwise) incurred by you due to use of or due to investment, product application decisions made by you on the basis of the contents herein. While the information is prepared in good faith from sources deemed reliable (including public sources), the Bank disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein, in any manner whatsoever.

To know more about Ujjivan Small Finance Bank Products Visit:"https://www.ujjivansfb.bank.in"

All intellectual property rights, including copyrights, trademarks, and other proprietary rights, pertaining to the content and materials displayed herein, belong to Ujjivan Small Finance Bank Limited or its licensors. Unauthorised use or misuse of any intellectual property, or other content displayed herein is strictly prohibited and the same is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person's nationality, residence or otherwise) be contrary to law or registration or would subject Ujjivan Small Finance Bank Limited or its affiliates to any licensing or registration requirements.

Explore Our Products